OK, problem solved!
All I had to do was plug the Reader into my computer, and erase everything on it. All the files, all the directories, everything. Then unplug it and let it "Load". Rebuild its database, basically.
Solved the problem. The "database" directory was automatically created -- I created a "books" one within it, transferred LRFs and PDFs to it, they're working just fine.
I've lost about 100 of the ebooks I had on the device, but have copies of those my hard disk, so can declare this thread closed -- with a happy ending!